Bristol Airport has lost a legal challenge it brought against the Welsh Government over a subsidy of £205 million to Cardiff International Airport Limited (CIAL).
The Welsh Government is the owner of CIAL, which it acquired in March 2013 for £52 million, supplemented by a £3.3 million working capital injection.
Although publicly owned, CIAL has been operated at arm’s length as a commercial entity within WGC Holdco Limited, itself owned by the Welsh Government, to ensure compliance with State aid and subsidy control requirements.
The Competition Appeal Tribunal, sitting in Cardiff in February, heard that Bristol Airport argued that at the date of the decision to make the subsidy in March 2025, CIAL was ailing or insolvent.
Now the Tribunal has ruled that none of the four grounds of challenge brought by Bristol Airport were made out. Accordingly, the appeal failed and the application for a declaration, quashing order and recovery order was dismissed.
The Welsh Government Ministers who made the subsidy decision were Rebecca Evans, Cabinet Secretary for Economy, Energy & Planning and Mark Drakeford, Cabinet Secretary for Finance & Welsh Language.
The specific policy objective of the subsidy was to address equity issues of social and economic disadvantage in South Wales by growing the economic activity associated with the airport and maximising the potential agglomeration benefits linked to the wider aviation and aerospace sectors in the region, the Tribunal heard.
The subsidy included £105.2 million funding for the development of maintenance, repair and overhaul facilities, construction of aircraft hangars, fixed base operator and cargo centre development and enhancement and various other infrastructure upgrades, along with funding various capital investment projects such as terminal building development and airfield lighting enhancement. This would include attracting companies focused on new aviation related technologies.
A further £100 million was for commercial passenger air route development. This involves funding incentive payments by CIAL to new and existing airlines in order to expand air routes flying in and out of Cardiff Airport.
In the course of deciding to make the subsidy the Welsh Government received documents including an Assessment of Compliance with the Subsidy Control Act 2022, dated March 2025.
The Assessment considered whether CIAL fell within the definition of “ailing or insolvent”. While noting that CIAL had operating losses resulting in previous subsidy and investment packages, it concluded that CIAL remained a going concern.
The Assessment stated that the Welsh Government viewed Cardiff Airport as essential infrastructure which, following the pandemic, was not delivering its full economic potential. The subsidy would help to address this equity rationale.
By developing new routes, the subsidy would generate potentially high-spending, inbound tourism. Developing routes to key cities in the EU, North America and the Middle East would also, among other things, support the Welsh Government’s ambition of increasing exports.
By securing airlines, including one or more Low Cost Carriers (LCCs), to operate new routes to and from Cardiff, the subsidy would increase employment at the airport and help increase passenger traffic.
The aim was that annual passenger volume would increase to 2.3 million passengers by the end of the ten-year period.
The Tribunal heard that Bristol Airport describes itself as the primary gateway to the South West of England and South Wales. In 2024, 10 million people used Bristol Airport.
It employs 5,000 staff on the airport site and says that it supports 30,000 jobs in the wider region. Bristol Airport is owned by a Canadian pension fund, the Ontario Teachers’ Pension Plan.
Responding to the ruling, the Welsh Government said:
“We welcome the Competition Appeal Tribunal ruling that our investment in Cardiff Airport is lawful and can continue on its current terms.
“From the outset we recognised the huge potential of the airport to deliver significant additional benefits for the people and economy of South Wales.
“The leadership team at the airport will continue to deliver the economic objectives set out in our investment strategy. With a more certain future following the determination of the tribunal, we look forward to seeing the airport build on recent successes, including securing the new WestJet route from Cardiff to Toronto and to deliver even more services and attract more business and job opportunities to the region.
“The airport, which recently celebrated a 9% growth in passenger numbers for last year, is looking forward to its busiest summer flying programme in many years, and we very much hope to see both Cardiff Airport and Bristol Airport continue to thrive and grow.”
